Sensex up 172 points, Nifty ends at 7562; Infosys, Reliance lead

13 January 2016

3:30 pm Market closing: After an extremely volatile session, the market has ended with gains. The Sensex ended up 172.08 points or 0.7 percent at 24854.11 and the Nifty gained 52.10 points or 0.7 percent at 7562.40. About 637 shares have advanced, 2162 shares declined, and 166 shares are unchanged.

Infosys, Reliance, Tata Motors, Hindalco and M&M were top gainers while Adani Ports, L&T, Bharti Airtel, BHEL and Lupin were losers in the Sensex.

2:55 pm Market Update: The market extended rally with the Sensex rising 206.09 points or 0.83 percent to 24888.12 and the Nifty up 57.85 points or 0.77 percent to 7568.15 on short covering.

About 523 shares have advanced, 2233 shares declined, and 159 shares are unchanged on the BSE.

"UK Medicines and Healthcare Products Regulatory Agency (MHRA) has conducted a good manufacturing practice (GMP) inspection of the company's plant at Goa in the month of November 2015. Pursuant to the inspection, UK MHRA has issued certain observations which company has responded to," Marksans Pharma said in a regulatory filing.

The company is awaiting further response from UK MHRA in this matter as on date, it added. Meanwhile, the the Goa plant is functioning normally and the shipments to UK is continuing in the normal course of business, the drug firm said. The company's Goa plant is one of the biggest facilities for soft gelatin capsules and tablets in Asia.

2:20 pm Market Expert: Although he was surprised at the sudden reversal in the market today, Ajay Srivastava, CEO, Dimensions Consulting would not be surprised if the market fell another 5-10 percent around Budget.

According to him, the current correction could be because of a lot of unwinding in midcaps and smallcaps due to nervousness of the midcap optimism and the expected outperformance going bust. . The low IIP number too was a dampener and has added to the nervousness believes Srivastava. It looks like market is sensing there is trouble ahead and people are not committing to fresh positions, he adds.

2:00 pm Market CheckThe market bounced back in afternoon trade with the Nifty getting back above 7500 level, aided by Reliance Industries and Infosys that rallied 3 percent each. European markets gained around 1 percent following recovery in oil prices.

The 30-share BSE Sensex recovered more than 350 points from day's low, up 90.92 points to 24772.95. The 50-share NSE Nifty climbed 26.25 points to 7536.55. However, the broader markets halved losses with the BSE Midcap down 0.8 percent and Smallcap down 2.3 percent.

The market breadth remained in favour of declines with ratio of 5:1 on the Bombay Stock Exchange.

1:55 pm New scheme: The cabinet ratified India's first major crop damage insurance scheme for farmers, a government source said, in what is Prime Minister Narendra Modi's first significant move to address rural hardship.

The impact of unseasonal rains and two straight years of drought on agriculture that sustains over two-thirds of India's 1.25 billion people has dented Modi's popularity in the countryside, contributing to a humiliating loss for the premier in elections last year in the largely rural state of Bihar.

Agriculture Minister Radha Mohan Singh said last week that New Delhi will launch the crop insurance scheme in the fiscal year starting April 1.

1:45 pm Nestle: The Supreme Court today asked the government laboratory in Mysore to further clarify whether test reports relating to lead and glutamic acid in Maggi noodles are within permissible parameters under the law.

The apex court passed the order after perusing two communications received from the Mysore laboratory which had carried out the test about the monosodium glutamate (MSG) content in the samples.

While Nestle India, makers of Maggi, claimed that the lead content was within the permissible limit prescribed under the Food Safety Act, the Centre said there was a need for comprehensive findings of all other parameters. Making it clear that it was not passing any interim order, a bench headed by Justice Dipak Misra said there was a need for the clarification.

1:30 pm Market outlook: The current correction in the market is a great opportunity for initiating long term investments, says Raamdeo Agarwal, joint MD at Motilal Oswal Financial Services. He recommends investment into systematic investment plans (SIPs) to reap maximum benefits. Speaking to CNBC-TV18, Agarwal says that he does not expect correction to the extent of 10 percent from current levels. However, he says there is a 70 percent probability that the market will move higher in a one-year time period and just 20-25 percent chances of it falling. The recent fall in commodity prices have changed the government's fiscal position, he says. Fall in oil prices has strengthened the government's position, which will push the economic growth, he adds. Commodity prices, in recent times, have benefitted India, but not other emerging markets that are dependent on it.

The market continues to fall sharply. Both the benchmark indices are down around 1 percent. The Sensex slips 264.65 points at 24417.38 and the Nifty is down 78.30 points or 1 percent at 7432. About 328 shares have advanced, 2374 shares declined, and 126 shares are unchanged.

Crude oil futures recovered 2.21 percent to Rs 2,171 per barrel today as speculators raised their bets amid a rebound in the Asian trade. The rise in crude oil futures was largely in tune with the rebound in its prices in Asian trade on Wednesday, halting a plunge that saw fall below USD 30 a barrel for the first time in more than 12 years but analysts warned of further pressure on the commodity.

12:45 pm Nifty breaks 7450: The market extended losses in afternoon trade with the Nifty falling below 7450 level following further correction in China. The Sensex lost 200 points.

Ajay Srivastava of Dimensions Consulting says the market could see correction of 5-10 percent from current levels. Key reason for weakness in banks is uncertainty over asset quality, he adds.

12:40 pm Goldman on TCS: TCS October-December revenue disappointed for sixth consecutive quarter but that is definitely not worrying analysts. Most analysts are still positive on the IT major but have slashed target price and tweaked revenue growth estimates. Shares of TCS fell 3 percent intraday today.

Few positive about Q3 result is its hold on attrition level, falling to 15.9 percent from 16.2 percent (Q-o-Q) reversing several quarters of increases. The digital business also grew 4 percent, contributing 14 percent of revenue.

Maintaining buy rating, Goldman Sachs has reduced target price to Rs 2600 from Rs 2670 per share as it believes TCS's sector-leading cash returns justify its 15 percent premium versus sector on FY17. It has also changed its FY16-FY18 earnings per share (EPS) by up to 1 percent factoring in Q3 revenue growth miss.

12:20 pm Market Outlook: The current correction in the market is a great opportunity for initiating long term investments, says Raamdeo Agarwal, joint MD at Motilal Oswal Financial Services. He recommends investment into systematic investment plans (SIPs) to reap maximum benefits.

Speaking to CNBC-TV18, Agarwal says that he does not expect correction to the extent of 10 percent from current levels. However, he says there is a 70 percent probability that the market will move higher in a one-year time period and just 20-25 percent chances of it falling.

The recent fall in commodity prices have changed the government's fiscal position, he says. Fall in oil prices has strengthened the government's position, which will push the economic growth, he adds. Commodity prices, in recent times, have benefitted India, but not other emerging markets that are dependent on it.

11:55 am Macro data outlook: The rise in the consumer price index (CPI), which came in at 5.6 percent in December, was largely driven by a sharp rise in pulses prices, which will likely remain high for a while, says Anubhuti Sahay, Economist at Standard Chartered. Still, she says there is no worry on the overall inflation number: she expects CPI in January 2016 to stay below RBI's target of 6 percent, and in January 2017, below the 5 percent target. Immediately, the RBI will likely do nothing at its February policy meeting, in light of global uncertainties and the looming Budget.

11:45 am Fund raising: Tata Power said it has raised Rs 500 crore by issuing unsecured redeemable, taxable non-convertible debentures on private placement basis. "The Company has successfully issued and allotted 5000 unsecured, non-cumulative, redeemable, taxable, listed, rated Non-Convertible Debentures (NCDs) of the face value of Rs 10 lakh each aggregating Rs 500 crore on a private placement basis," Tata Power Company informed BSE today. According to the filing, these NCDs carry a floating interest rate linked to Base Rate of State Bank of India and have been rated CARE AA by CARE Ltd.

11:30 am Boardroom: IndusInd Bank's third quarter earnings exceeded expectations. The bank's net profit grew 29.9 percent to Rs 581 crore boosted by other income, operating profit and net interest income. NII rose 36.2 percent to Rs 1,173 crore year-on-year (YoY). Asset quality remained stable with a 13.5 percent growth in the net non-performing asset (NNPAs) to Rs 681 crore. Romesh Sobti, MD & CEO of the bank expects recognition in asset quality to worsen for the banking sector in coming quarters before improving. The NPAs have been managed well and the bank does not have any sectoral risks, Sobti says adding that it is too early to say whether stressed assets are stabilising.

Speaking to CNBC-TV18, Sobti says that growth in both retail and corporate space has been robust in the third quarter. Demand recovery is visible in the commercial vehicle (CV) space, he says adding that growth in two-wheelers and CVs is expected to continue. The bank's vehicle finance stands at 35-36 percent of the total book.

Unable to hold early gains, the market is fast slipping away. The Sensex is up 61.92 points or 0.2 percent at 24743.95 and the Nifty is up 4.80 points at 7515.10. About 652 shares have advanced, 1701 shares declined, and 142 shares are unchanged.

Tata Motors, M&M, Infosys, Reliance and HUL are top gainers while TCS, Adani Ports, L&T and ICICI Bank are laggards in the Sensex.

Aditya Narain, Citi says he remains positive on the market with a 32,000 Sensex target for December 2016. He believes the market needs earnings support and direction to gain some legs.

"It need not be the 20-18 percent FY17-18 earnings we forecast - a 15 percent should be good enough," he says, adding, that the market is presuming downgrades and a modest quarter lends a cushion.

According to him, earnings beats could well surprise more than earnings misses.

"Crompton has received a contract from Denmark's national electricity transmission system operator Energinet.dk to provider power transformers and gas insulated switchgear for Kriegers Flak wind farm project in the Baltic Sea," says the Avantha Group company in its filing.

Kriegers Flak will be Denmark's largest offshore wind farm project and is to be developed in close partnership with their regional neighbours Sweden and Germany.

The broader markets also traded in line with benchmarks. The BSE Midcap and Smallcap indices gained 0.9 percent each. The market breadth remained strong too as about three shares advanced for every share declining on the Bombay Stock Exchange.

9:55 am FII view: According to Adrian Mowat, Managing Director, Chief Asian & Emerging Market Strategist, JP Morgan there is little change in the macro economic data of emerging markets and what is going on is more of a technical story, like for example the circuit breakers in Shanghai at the start of the trading year. So, one will continue to see outflows from emerging market equities believes Mowat. However, he does not think the current situation in the markets is similar to that of 2008 crisis.

For India specifically there is nothing relatively more negative than what is going on in other markets, says Mowat adding that the one big event that could cause significant outperformance for India would be the RBI moving into a easing cycle but that is still a bit away due to market volatility and concerns over capital flows into the emerging markets.

9:45 am Bharti's sale: Telecom operator Bharti Airtel announced that Orange will be buying its mobile business in Burkina Faso and Sierra Leone. Orange will acquire 100 percent of the two companies' share capital. The consolidated revenue of the two companies is around 275 million euros.

The acquisitions are expected to be implemented in partnership with Orange's subsidiaries and the outlay for Orange will be based on financials of company's two arms for FY16.

Speaking on the deal, Nitin Soni, Director, Asia Pacific Corporate Ratings at Fitch Ratings says that it is the right step for Airtel as it can now concentrate more on its domestic business. However, the deal will not provide much leverage for the company, he adds.

9:30 am TCS Boardroom: TCS Chief Executive N Chandrasekaran says that there have been no negative indications in the busines environment for 2016, and expects US to be the main growth of engine for his company.

In an interview to CNBC-TV18, he says the company is still in the process of collecting inputs from clients on their IT spending budgets. TCS's December quarter earnings announced post market hours Tuesday fell short of market expectations. Chandrasekaran tells CNBC-TV18 that the quarter gone by was the worst December quarter since the global financial crisis of 2008-09.

The market has opened firm following global lead. The Sensex is up 179.71 points or 0.7 percent at 24861.74 and the Nifty is up 52.50 points or 0.7 percent at 7562.80. About 591 shares have advanced, 81 shares declined, and 42 shares are unchanged.

Bharti Airtel, BHEL, Tata Motors, Hindalco and Axis Bank are top gainers. Infosys is up over 1 percent. TCS is in red.

The Indian rupee has opened marginally higher at 66.82 a dollar compared to 66.86 per dollar in previous session.

Pramit Brahmbhatt, Veracity says considering weakness in equity market, the rupee has managed to remain below Rs 67/USD. According to him, the rupee is still expected to remain positive and Rs 67.10/USD is the next level to watch on the upside and Rs 66.50/USD on the downside.

Asian shares crept off four-year lows as China's efforts to stabilize its currency brought a moment of calm to equity markets, even as oil marked a sorry new milestone under USD 30 a barrel.

Investors were again watching where the People's Bank of China sets the yuan after two sessions of firm fixes. The central bank has also engineered a huge leap in yuan borrowing rates in Hong Kong, essentially making it prohibitively expensive to short the currency.

A late rebound in energy and biotech shares helped push the S&P 500 to a second straight day of gains, while Apple and other technology shares also boosted the market. The Nasdaq snapped an eight-session losing streak, with the Nasdaq Biotech Index rebounding late, also breaking an eight-day run of losses. The biotech index, among the hardest-hit in this year's selloff, ended up 1.5 percent.

Benchmark Brent was quoted 81 cents lower at USD 30.86 a barrel. US crude has fallen 17 percent in just seven sessions, a gift to consumers across the globe but also a strong force for disinflation.